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Posted Wed, 10 Apr 2024 08:47:29 GMT by K3McL
I am trying to establish the rules for an employee where an employer pays a tax bill on their behalf. If the tax due is therefore all paid, does the employee have to pay it back to the company? Can the company choose to write it off?
Posted Wed, 17 Apr 2024 13:43:43 GMT by HMRC Admin 2

This would be classed as the employer paying an employee's personal bill. It will need to be reported on a P11D for tax purposes and put through payroll for Class 1 National Insurance.

Expenses and benefits: personal bills

Thank you.
Posted Wed, 17 Apr 2024 14:33:22 GMT by K3McL
Hi thank you for the reply. Apologies but I am still slightly unclear. I’m trying to establish if this is a legitimate process as a one off. If the company pay the employees tax, declare it on the P11D and class one is also paid on earnings, on this basis HMRC get the tax and the NI owed on the earnings. The debt is then with the company and not to HMRC. Assuming taxes and NI are correctly paid to HMRC, the question is can the company chose to write off the debt the employee technically owes the company? Or must it be reclaimed? Or does the employee owe tax anyway as BIK? On the basis they effectively take home more than they should in that payment. In which case HMRC get two tax payments on the same earnings. If this was the case it’s not something the company would be prepared to consider as we end up out of pocket unnecessarily. lengthy question but hope it makes sense. Thank you
Posted Mon, 29 Apr 2024 11:19:28 GMT by HMRC Admin 5
Hi K3McL

For assistance you will need to contact the employers helpline Employers: general enquiries

Thank you

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